“Modi has officially steered India’s economy into contraction as a result of his war on cash. Just what I anticipated would happen,” Hanke, an American applied economist at the Johns Hopkins University in Baltimore, Maryland, said in a series of tweets.

“Manufacturing takes the hit as the war on cash in India adversely impacts the economy. Modi,” he added.

Hanke, who is also a Senior Fellow and director of the Troubled Currencies Project at the Cato Institute in Washington, DC, further said, “Demonetization will cause India to slip from the leaders board for economic growth in 2017.”

Referring to the interest rate cut by some Indian banks post demonetization, the eminent economist said, “Indian banks have slashed interest rates to stave off economic decline and to spark investment. A demonetization disaster.”

Prime Minister Narendra Modi on Nov. 8 had announced demonetization of Rs 1,000 and Rs 500 notes making them invalid in a major assault on black money, fake currency and corruption.

Following demonetization, the manufacturing sector contracted in December as new work orders and output took a knock for the first time in 2016.

The Nikkei Markit India Manufacturing Purchasing Managers’ Index — an indicator of manufacturing activity — fell to 49.6, down from 52.3 in November.

The index came in below the crucial 50 threshold — which separates contraction from expansion — for the first time in 2016 in December.